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Income Tax Act 2007

Timing and quantifying rules - Financial arrangements rules - Consideration when anti-avoidance provision applies

EW 52: Share supplier under share-lending arrangement

You could also call this:

“Rules for lending shares you've acquired through a financial arrangement”

You can be a share supplier in a share-lending arrangement. This means you first get a share through a financial deal. Then, you lend this share to someone else (the share user) as part of the share-lending arrangement.

If you get your original share back from the share-lending arrangement, the law treats it as if you never gave it away. It’s like you kept owning it the whole time.

If you get a share that’s exactly the same as your original one (called an identical share), the law treats this new share as if it were the original one you first got. It’s as if you owned this identical share from the start, until you got the replacement share.

These rules help figure out how to handle the money side of your original financial deal, even when you’ve lent out your shares.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1515366.

Topics:
Money and consumer rights > Taxes
Money and consumer rights > Banking and loans
Business > Industry rules
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Part E Timing and quantifying rules
Financial arrangements rules: Consideration when anti-avoidance provision applies

EW 52Share supplier under share-lending arrangement

  1. This section applies to a person who—

  2. acquires a share under a financial arrangement (the original financial arrangement); and
    1. is the share supplier for a share-lending arrangement; and
      1. disposes of the share to the share user as an original share under the share-lending arrangement.

        1. If the person reacquires the original share under the share-lending arrangement, for the purposes of applying the financial arrangements rules to the original financial arrangement,—

        2. the person did not dispose of the original share to the share user; and
          1. the person continued to own the original share until the time that the person reacquired the original share.

            1. If the person acquires an identical share under the share-lending arrangement, for the purposes of the financial arrangements rules in relation to the original financial arrangement,—

            2. the identical share is the share that the person acquired under the original financial arrangement; and
              1. the person continued to own the identical share until the time that the person acquired the replacement share.

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